FREQUENTLY ASKED QUESTIONS
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WHAT IS AN APPRAISAL?
A residential real estate appraisal is an unbiased and professional opinion of a property’s value by a licensed appraiser. It is typically an important part of the home buying, selling or refinancing process because the results can affect the borrower’s ability to receive a loan. The appraiser will perform an independent and neutral assessment of the property’s value, without pressure from the lender, buyer, seller or other interested party. The appraiser will complete a visual inspection of the home’s interior and exterior by walking the property and grounds, drive around the neighborhood, research recently sold comparable homes nearby and analyze public record data. The appraiser will then compile a report on the home’s appraised value and share it with the client (whoever ordered the appraisal report). Typically, appraisals are ordered by the lender. The appraisal is used to determine whether the home’s contract price is appropriate given the home’s condition, location and features. Most lenders require a home appraisal to ensure the borrower isn’t taking a loan out for more money than the property is worth. The cost of an appraisal is typically covered by the buyer.
DOES THE HOMEOWNER RECEIVE A COPY OF THE APPRAISAL REPORT?
Yes, the homeowner has the right to receive a free copy of their home appraisal for a first-lien mortgage. For first lien and certain higher-priced mortgage loan applications, mortgage lenders are required to provide the home owner with a free copy of all appraisals and other written valuations that provide an estimate of the value of their home. For first lien applications, lenders are required to send the homeowner a copy promptly after the appraisal report is completed, and no later than three days before the loan closes. However, the appraiser is not permitted to provide a copy of the report to anyone other than the client (typically the lender) and any other persons to whom the client has requested the report to be available.
WHAT IS AN ESTATE APPRAISAL?
An estate appraisal is a written opinion from an expert about how much an asset is worth. It is typically performed to determine the market value of real estate after the owner has died. The appraisal can help to determine what taxes need to be paid. It can also help to divide the estate among the heirs, if that was the desire of the owner and it was in their will. Executors need to know the date-of-death value of everything in the estate or trust, even if only one person is inheriting the estate.